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Business Logistics
Business Logistics
0 Content
1.0 Content 2
2.0 Introduction 3
6.0 Conclusion 17
When used in a business sense, logistics is the management of the flow of things
between the point of origin and the point of consumption in order to meet requirements
items such as food, materials, animals, equipment, and liquids, as well as abstract items,
such as time and information. The logistics of physical items usually involves the
There is often confusion over the difference between logistics and supply chains.
encompasses manufacturing and procurement and therefore has a much broader focus, as
planning and organization of these activities. Logistics may have either an internal focus
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3.0 Task 1
(a) Discuss the importance of three components in a successful supply chain. What is the
Supply Chain Management (SCM) can be divided into three main areas:
purchasing, manufacturing, and transport. From end to end, this includes decisions about
which input materials to use, production quantities, inventory levels, distribution network
configuration, and transportation for both the input materials as well as for the finished
products. For one company, a warehouse near the shipping docs is imperative for
receiving goods from suppliers. For another company, a centralized location is a central
hub in the middle of the city, where deliveries are made promptly to any part of the city
and outlying communities. Warehousing ensures you can do this with "security stocking."
Having enough stock to handle the normal supply needs for this month and next month
means you can fulfill orders even if your suppliers are delayed or incoming inventories
are lost or damaged. Having one central warehouse that stores all your goods feeding your
distribution process will have you constantly in control of the stock available as well as
what is needed in the near future. This is called safety stocking, ensuring your business
doesn’t run into unexpected problems such as faulty stock or shipment delays.
One of the key improvements businesses can make in their supply chain
inventory and manufacturing into account while playing a role in overall cost. For a long-
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term customer satisfaction strategy focused around product packaging, a firm needs to
enhance their traceability and convey that improvement to the customer through
packaging and supply chain labeling. Furthermore, packaging options continue to evolve,
with new materials and labeling options available to increase customer engagement and
enhance the quality of the packaging overall. These too have an impact on the shopping
without impacting customer service levels, because any uncertainty within the network
can be monitored and appropriately managed to keep inventory levels as low as possible.
are often trapped in the traditional view that transportation is a necessary evil – an
inevitable source of cost and risk. And who can blame them? Transport is by far the
research (Chang, 1998), transport accounts for as much as 30% of the total cost of
Information is a key supply chain driver because it serves as the glue that allows
other drivers to work together with the goal of creating an integrated, coordinated supply
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functional processes. Several well know firms involved in supply chain relationship
through information technology. Three factors have strongly impacted this change in the
something of a corporate obsession. Serving the customer in the best, most efficient and
effective manner has become critical. Second information is a crucial factor in the
The major activities can be divided in three parts – pick-up from supplier, storage or
warehousing & distribution to end customer as per demand. The sub activities include in
the whole operations are: pick-up of the goods from supplier, packaging, transportation
via air, sea and road, customs clearance, delivery of the goods, warehousing, Quality
(c) How warehouse tracking system (WTS) will be helpful in warehouse transportation?
organizations to control and administer warehouse operations from the time goods or
materials enter a warehouse until they move out. Operations in a warehouse include
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Implementing a WMS can help an organization reduce labor costs, improve
and shipping goods, and improve customer service. Modern warehouse management
systems operate with real-time data, allowing the organization to manage the most current
information on activities like orders, shipments, receipts and any movement of goods.
words, it enables accurate stocking, slotting and pulling of orders, giving companies the
opportunity gain higher-level insights into how much of each item is truly needed.
Therefore, they can reduce overstock and minimize understock simultaneously to save
space. The benefits of a warehouse management system (WMS) also promotes customer
satisfaction and service by reducing errors in the order fulfillment process. Also, the
system ensures customers receive undamaged products and promptly. Thus, the number
keeping units (SKUs) that are handled and stored, Warehouse storage location and
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4.0 Task 2
(a) Why companies are turning to 3PLs in the warehouse and distribution space?
Third-party logistics providers are an excellent resource and an integral part of the
ultimate success of your growing business. A third-party logistics provider, also known
as a 3PL, acts as your logistics partner to manage the process of warehousing and shipping
Being more efficient in terms of time and money is a major benefit that 3PL
technologies, companies can reduce their costs drastically, while simultaneously freeing
up more time to focus on core business initiatives. 3PL’s often offer volume discounts on
shipping and shared warehousing facilities, which matters to your bottom line.
Third party logistics providers have a vast resource network available that
provides advantages over in-house supply chains. With access to a 3PL provider network,
supply chains can be expanded quickly, efficiently, and in a cost-effective manner. The
relationships that many 3PL providers have with those in their network can open up
opportunities for companies to receive volume discounts, lower overhead costs, and
timelier service.
One of the advantages of working with a 3PL provider is the ability to easily
position your supply chain in markets where you don’t have an established presence.
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Having access to distribution centers and warehouses in various regions allows
companies to grow in new areas by being able to ship goods efficiently to anywhere in
the world.
success. Many in-house supply chains can become overwhelmed by the amount of work
they have to accomplish with limited resources. By partnering with a 3PL provider,
manufacturers can ensure the happiness of their customers by offering faster delivery
Depending on what your needs are, 3PL providers have the ability to scale space,
labor, and transportation based on the fluctuation of your inventory. Whether you’re
dealing with seasonal inventory or new product releases, 3PLs can help provide adequate
space and resources between your busy and slow times, giving you maximum amounts
Whether your business is big or small, partnering up with a 3PL provider can offer
many management solutions for all types and sizes of companies. When many companies
examine their current logistics needs, they will often find that utilizing a third-party
provider will reduce their expenses and result in better customer service.
The costs of operating a small car – including fuel, maintenance, and parking –
can exceed the food budget of many families. If you are not ready to give up an
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automobile completely, replace some of your trips with public transportation. Most
smaller communities offer scheduled bus services, while larger cities combine reliable
bus services, rapid light rail, and commuter rail systems that are inexpensive and
extensive. Many of the services provide space for passengers to load their bicycles for
Carpooling is especially practical where people regularly travel to and from the
same location. Even in situations where using a car is required, it doesn’t have to be your
car. Parents who pick up children at school can arrange to share trips with other parents.
Automobile insurance is one of the larger expenses of car ownership. Laws in most states
require that all drivers carry liability insurance to protect the public, and most lenders
Proper maintenance of your vehicle will ensure safe, reliable operation and slow
major declines in resale value. For example, regularly detailing – cleaning an automobile,
both inside and out, to restore a like-new appearance through attention to details – can
add hundreds, or even thousands of dollars to its value. Consider paying for fuel with
cash. Posted prices at many gasoline stations include an extra six to eight cents per gallon
when using a credit card. If not cash for purchases, use a gas credit card to earn valuable
cash back. Additionally, many gas stations associated with grocery store chains and
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If a free route is available, consider whether the time and distance you might save
is really worth it, advises family travel veteran Meghan Khaitan. “Tolls can range from
seat beat holders. “Set your GPS to avoid toll roads when mapping out your route.
Consider the cost of added gas to use non-toll roads, and decide which route is more
economical.”
If you know you’ll need to pay for parking at a special event, you can save time
and money by reserving a spot in advance through sites like SpotHero. In just one
example, a recent SpotHero search for parking near the Air and Space Museum in
Washington, D.C., offered a price range of $12 to $20 for nearby options. SpotHero also
Working from home not only cuts your transportation costs, but it could save your
per year if those who were able spent half their hours on the clock working from home.
“An excess 100 pounds in the trunk can reduce your fuel economy by 1 to 2
percent.”The money you stand to save varies according to the make and model of your
car. To calculate how much you can save by improving your car’s average miles per
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Slowing down, limiting your acceleration and eliminating sharp stops can all help
you save money on gas, according to research from Edmunds. If your cruise speeds range
from 75 to 85 mph, and you constantly accelerate, change lanes and brake sharply, you
can improve your fuel economy by an average of 35 percent by driving with cruise control
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5.0 Task 3
Reverse logistics is for all operations related to the reuse of products and materials.
It is "the process of moving goods from their typical final destination for the purpose of
In the first instance, companies can retrieve defective equipment and parts which
are either salvaged or refurbished and thus reclaims value out of the defective parts.
Secondly, the packaging and defective materials are collected and recycled thereby
generating scrap value back for the company. Thirdly unsold and obsolete equipment are
collected back from the point of sale which encourages the distributors and stockists to
buy confidently stocks from the company knowing that he can always return unused
inventory and not stand to lose in the bargain. Distributors are more likely to be open to
management strategies to keep materials in the supply chain. Resource managers will be
On the other hand, while the process demands that the defective part be returned
in good condition, both users and retailers do not give enough attention to handling
defective parts. Statistics has shown that the defective parts are found to have suffered
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more transit damage and handling damage than the good part. A lack of understanding
that the defective part has value to the organization is noticed in few cases of the sales
staff of the organizations as well as retailers, who treat defectives as scrap. As one of the
India’s foremost specialists in reverse logistics for electronics retailers and manufacturers,
it’s our priority to get items back into the market, recovering maximum value. Should the
product be damaged or faulty, Nasci Ecology’s dedicated team of technicians repair and
The era of one fits all type of service providing has ended. Nowadays, logistics
solutions must be tailored to each customer. Full transparency of orders, visibility from
raw material stage to final goods sale, and reverse logistics have almost become standard
for some commodity groups. With too many variables in global logistics and many
different parties getting involved, keeping above level of service might be challenging at
times.
of vessels, it takes months to discharge. Air cargo takes less time, but they are expensive.
There is a lack of infrastructure. Many terminals are trying to make room for large vessels.
This is causing congestion problems. If these infrastructure issues are not resolved fast,
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Overcapacity in ocean shipping and tightening capacity in domestic shipping in
the US are both affecting the logistics world in a different way. Various studies were
conducted by Drewry and Alphaliner. They found that freight rates are on continuous
pressure due to large vessel deliveries. Lack of demand and oversupply was one of the
biggest problems in the past few years. The three largest container carriers — Maersk,
MSC and CMA CGM — have on order capacity equal to 15.6 percent of their current
combined fleet; the next 18 largest carriers have orders equal to 19.8 percent of their
existing fleet.
Security is growing concern in logistics industry due to goods are being passed
from provider to provider. Shippers book the cargo with local truckers in origin, who
deliveries the cargo to local warehouse for handling. The warehouses then load the cargo
to trucks which deliver the containers to ports. When the shipment arrives to its final
destination, it has passed through seven or eight different sets of hands. Unless everyone
involved in this process does their due diligence, security becomes a problem.
(c) What are the important aspects of transportation and fleet management?
Fleet management involves a series of diverse tasks for businesses who rely on
acquisition, fuel management, compliance and more. It covers the scope of many
industries from freight, to delivery, sales and service, oil & gas, and emergency services.
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transport Planning, routing maintenance planning, fleet maintenance and scheduling, risk
management.
Companies who have been using Fleet Management agree that it generally allows
businesses using it to Acquire more control over drivers and vehicles. Less time spent on
predicting time of departure and arrival, getting hold of traffic updates and road
conditions improves productivity. It can save on fuel consumption and prevent delays on
deliveries. Apart from that, it can reduce road accidents, improve driving habits and
prevent dubious reporting. Next, fleet management prevent unauthorized use of vehicles
and track and recover lost vehicles. Customer get better service having real-time access
about the location of their assets. Lessen driver frustration while on the road, increasing
employee satisfaction all around. Last but not least, it also can reduce cost of insurance
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6.0 Conclusion
logistics management requires transportation to perform its day to day activities and
andtraffic environment. Since transportation contribute the highest cost among the related
elements in logistics systems, the improvement of transport efficiency can change the
logistics system and its activities appear in various sections of logistics processes.
Without the linking of transportation, a powerful logistics strategy cannot bring its
The review of logistics system in a broad sense might help to integrate the
advantages from different application cases to overcome their current demerits. Review
Development of logistics will be still vigorous in the following decades and the logistics
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7.0 References
1. https://courses.lumenlearning.com/suny-hccc-introbusiness/chapter/supply-chain-
management-and-logistics-2/
2. https://smallbusiness.chron.com/importance-warehousing-logistics-system-
74825.html
3. https://www.bridgewaterlogistics.co.za/the-effectiveness-of-warehousing-in-the-
supply-chain-process/
4. https://www.loftware.com/blog/packaging-plays-a-more-important-role-in-supply-
chain-management-than-realized/
5. https://eyefreight.com/the-role-of-transportation-in-supply-chain-management/
6.
https://www.academia.edu/15279484/The_Importance_of_Transportation_in_Supply_C
hain_Excellence
7. https://www.scribd.com/doc/52905109/ROLE-OF-Information-TECHNOLOGY-IN-
SUPPLY-CHAIN-MANAGEMENT-2
8. http://www.indianmba.com/Faculty_Column/FC461/fc461.html
9. http://www.supplychainforum.com/showthread.php/4437-Activities-performed-at-
operational-level-in-logistics
10. https://en.wikipedia.org/wiki/Warehouse_management_system
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11. https://www.fmicanada.com/logistics-freight-warehouse/why-companies-are-
turning-to-3pls/
12. https://www.moneycrashers.com/save-transportation-costs/
13. http://www.nascieco.com/reverse-logistics.html
14. http://www.baneasa-airport.com/5-major-problems-global-logistics-industry-facing/
15. https://specialties.bayt.com/en/specialties/q/383737/what-are-the-important-aspects-
of-transportation-and-fleet-management/
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8.0 Coursework
The time advantage Time measures how long a customer has to wait in order to receive
a given product or service. Volkswagen calls this time the customer to customer lead
time: that is, the time it takes from the moment a customer places an order to the
moment that customer receives the car he or she specified. Such lead times can vary
from zero (the product is immediately available, such as goods on a supermarket shelf)
about survival of the fastest! Time can be used to win orders by companies who have
learned that some customers do not want to wait — and are prepared to pay a premium
to get what they want quickly. An example is Vision Express, which offers prescription
spectacles 'in about one hour'. Technicians machine lenses from blanks on the premises.
Staff are given incentives to maintain a 95 per cent service level against the one-hour
target. Vision Express has been successful in the marketplace by re-engineering the
supply chain so that parts and information can flow rapidly from one process to the
next. Compare this with other opticians in the high street, who must send customer
orders to a central factory. Under the 'remote factory' system, orders typically take about
then has to join a queue with orders from all the other high street branches around the
country. Once the order has been processed, it must return to the branch that raised the
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order. While this may be cheaper to do (a central, highly productive factory serves all of
the branches), it takes much longer to process an order. The time advantage is variously
may help to improve freshness of the end product, or to reduce the risk of obsolete or
over-aged stock in the system. Time is an absolute measure, that is, it is not open to
interpretation like quality and cost. By following a product through a supply chain, we
can discover which processes add value and which add time and cost but no value.
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Figure 1.10 Four options for crafting strategy What are the implications for the way in
Evolve. 'Strategy' is not something that is formally undertaken at all. `Our strategy is
not to have a strategy' is a typical viewpoint. Operating decisions are taken in relation to
the needs of the moment, with financial goals as the main guiding principle.
Classical. While financial goals are again the main guiding principle, these are
achieved through a formal planning process. This is called 'classical' because it is the
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Accommodate. Here, decisions are back to the day-to-day mode, but financial
objectives are no longer the primary concern. Strategy is accommodated instead to the
Systemic. This option for strategy setting sees no conflict between the ends and
means of realising business goals. While goal setting takes place across all major
policies), these are linked to the means by which they will be achieved in practice.
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